Hong Kong’s Stamp Duty: A Comprehensive Guide for Property Investors
📋 Key Facts at a Glance
- Major Policy Shift: As of 28 February 2024, Special Stamp Duty (SSD), Buyer’s Stamp Duty (BSD), and the New Residential Stamp Duty (NRSD) have been abolished.
- Current Main Levy: The primary tax on property acquisition is the Ad Valorem Stamp Duty (AVD), with rates ranging from HK$100 to 4.25% based on property value.
- Critical Deadline: Stamp duty is generally payable within 30 days of signing the agreement for sale and purchase. Late payment incurs heavy penalties.
- Strategic Exemptions: Key reliefs remain, such as for intra-group transfers between companies with 90%+ common ownership.
Hong Kong’s property market is a landscape defined by its fiscal architecture. In a single policy move on 28 February 2024, the government removed three major transaction taxes, fundamentally reshaping the investment calculus. For investors, both local and international, this isn’t just about lower costs—it’s a signal to reassess long-held strategies. The remaining stamp duty framework, centered on the Ad Valorem Stamp Duty (AVD), is now the primary gatekeeper. Understanding its revised tiers and the surviving exemptions is no longer optional due diligence; it’s the blueprint for unlocking value and avoiding costly compliance traps in a transformed market.
The New Stamp Duty Landscape: Post-Abolition Rules
The 2024-25 stamp duty regime is markedly simpler than in previous years. The government’s removal of the BSD, SSD, and NRSD means that for the vast majority of buyers—whether individuals, companies, or non-residents—only one primary duty applies: the Ad Valorem Stamp Duty. This significant liberalisation aims to stimulate market activity and liquidity. However, the AVD itself operates on a progressive scale, and specific reliefs and exemptions still require careful navigation to ensure full compliance and optimal structuring.
Ad Valorem Stamp Duty (AVD): The Revised Rate Scale
AVD is payable on all agreements for the sale of Hong Kong property. The duty is calculated on the higher of the consideration or the market value. Crucially, the rate is now the same for all buyers—Hong Kong permanent residents, non-permanent residents, and local or foreign companies alike. The following table outlines the current progressive rates.
| Property Value (HK$) | Ad Valorem Stamp Duty Rate |
|---|---|
| Up to 3,000,000 | HK$100 |
| 3,000,001 – 3,528,240 | HK$100 + 10% of excess over HK$3,000,000 |
| 3,528,241 – 4,500,000 | 1.5% |
| 4,500,001 – 4,935,480 | 1.5% to 2.25% (on a sliding scale) |
| 4,935,481 – 6,000,000 | 2.25% |
| 6,000,001 – 6,642,860 | 2.25% to 3% (on a sliding scale) |
| 6,642,861 – 9,000,000 | 3% |
| 9,000,001 – 10,080,000 | 3% to 3.75% (on a sliding scale) |
| 10,080,001 – 20,000,000 | 3.75% |
| 20,000,001 – 21,739,120 | 3.75% to 4.25% (on a sliding scale) |
| Above 21,739,120 | 4.25% |
Navigating Stamp Duty Exemptions and Reliefs
While the duty landscape is simpler, strategic exemptions remain powerful tools for corporate structuring and estate planning. These are not loopholes but legislated reliefs with strict qualifying conditions. Misapplication can lead to the full duty becoming payable, plus interest and penalties.
Intra-Group Transfer Relief
This is a critical relief for corporate restructuring. Stamp duty may be waived on the transfer of property between two associated bodies corporate (e.g., a parent company and its subsidiary) if, both before and after the transfer, one company is the beneficial owner of not less than 90% of the issued share capital of the other, or a third company has 90% ownership of both.
Other Key Exemptions
- Divorce & Separation: Transfers between former spouses pursuant to a court order are exempt.
- Acquisition by a Trust: Certain acquisitions by trustees may be exempt if the beneficial interests do not change.
- Deceased Estates: Transfers of property to a beneficiary of a deceased person’s estate are not subject to AVD.
Compliance, Deadlines, and Penalties
Stamp duty compliance is non-negotiable. The Inland Revenue Department (IRD) imposes strict deadlines and severe penalties for late stamping.
| Period After Execution | Penalty |
|---|---|
| Within 30 days | No penalty (Normal stamping) |
| Over 30 days, up to 3 months | 2x the unpaid duty |
| Over 3 months, up to 6 months | 4x the unpaid duty |
| Over 6 months, up to 12 months | 6x the unpaid duty |
| Over 12 months | 10x the unpaid duty |
Additionally, an unstamped or improperly stamped document cannot be registered at the Land Registry and is generally not admissible as evidence in court. Interest is also charged on overdue stamp duty.
✅ Key Takeaways
- Verify the Date: The abolition of BSD, SSD, and NRSD only applies to agreements signed on or after 28 February 2024. Always confirm which regime governs your transaction.
- One Primary Duty: For most new transactions, only Ad Valorem Stamp Duty (AVD) applies, calculated on a progressive scale up to 4.25% of the property value.
- Plan for Exemptions: Reliefs like intra-group transfers (90%+ ownership) are powerful but require precise structuring. Get professional advice to ensure eligibility.
- Strict Compliance: Stamp duty must be paid within 30 days. Penalties escalate rapidly to up to 10 times the unpaid duty, and unstamped documents are legally impaired.
Hong Kong’s stamp duty reform marks a pivotal shift towards a more open property market. For investors, this simplifies the entry calculus but elevates the importance of strategic planning around the remaining AVD structure and available reliefs. In this new environment, treating stamp duty not as a fixed cost but as a variable element of your deal architecture is the key to maximising investment efficiency and ensuring seamless compliance.
📚 Sources & References
This article has been fact-checked against official Hong Kong government sources:
- Inland Revenue Department (IRD) – Official tax authority
- GovHK – Hong Kong Government portal
- IRD Stamp Duty – Official guidelines and rates
- 2024-25 Budget – Policy announcement on stamp duty abolition
Last verified: December 2024 | The information provided is for general guidance only. Tax laws are complex and subject to change. For professional advice tailored to your specific situation, consult a qualified tax practitioner or solicitor.